Josh Frydenberg new role as investment banker puts him on different path for now

Since his bruising loss in Kooyong, the highest profile victim of the Morrison government backlash has quietly rebuilt his life outside politics, but has also kept one eye on a possible return.

Josh Frydenberg’s his elevation at Goldman Sachs confirms he has left politics behind. Picture: Getty

Josh Frydenberg the investment banker means the former treasurer won’t be making a run back to politics – for the medium term.

There has been persistent talk in Liberal circles the one time leadership hopeful Frydenberg was preparing to make another tilt for the inner Melbourne seat of Kooyong after losing his seat to Teal independent Monique Ryan last year. Frydenberg still has the political fire burning in him but has kept it turned right down.

But the elevation to chairman of Goldman Sachs Australia and New Zealand puts him on a different path and Frydenberg has left day-to-day politics behind him – at least for the next few years.

Goldman Sachs is Wall Street’s establishment investment bank. Picture: Getty Images/AFP)

It is understood among those close to him that it was a tough decision to make but Frydenberg won’t contest the next election which will be held within two years.

Beyond that Frydenberg is expected to consider his options closer to the election after the upcoming one, taking that to as much as five years from now. That means the 52-year-old is now focused on a new career with the establishment Wall Street bank but it also gives him private sector grounding and experience if he eventually decides to make another play.

Since the bruising loss – the highest profile victim of the Morrison government backlash – Frydenberg has quietly rebuilt his life outside politics, all while keeping one eye on a possible return.

After the May defeat, Goldman Sachs chief executive Simon Rothery saw the potential and was among the first to extend an offer to the treasurer for a job as senior regional adviser for Asia Pacific.

There the focus was more offshore and that gave Frydenberg room to steer clear of domestic issues. Frydenberg too was careful to stay out of politics at Goldman, pulling completely back from his previous high profile he had in his political life.

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Over the past 18 months the role has allowed him to steadily work with Goldman clients on bigger picture issues while the job has taken him around the world in building up relationships across Japan, Hong Kong and Singapore – countries Frydenberg engaged heavily with as treasurer and before then as energy minister.

However, an adviser position – as opposed to an executive – was informal enough to give Frydenberg the flexibility of returning back to politics in time for the 2025 (or earlier) election if he wanted to return to Canberra.

But Rothery was playing the long game with Frydenberg.

Thursday’s elevation to chairman – a significant appointment for Goldman – makes the relationship more permanent.

Frydenberg “will focus on further deepening and strengthening client coverage across the Australia NZ region,” Rothery said. “He will continue to offer advice on economic and geopolitical issues as the firm’s senior regional adviser for Asia Pacific (and) further enhance our One Goldman Sachs client focus”.

Josh Frydenberg in 2022 after the Liberal Party lost the federal election. Picture: Andrew Henshaw

The chairman position works well for both Frydenberg and Goldman. Frydenberg will use his formidable contact list to open doors for the investment bank and woo clients. He will offer advice on the political and economic landscape and is increasingly likely to be used as the local face of the firm.

Commonwealth Bank chairman and the former BlueScope Steel chief executive Paul O’Malley said he started working closely with Frydenberg when he was an energy minister in the Turnbull government.

Commonwealth Bank chairman Paul O’Malley said the appointment to the new role will be “highly complementary” for both Goldmans and Frydenberg.

O’Malley, the former BlueScope Steel chief executive said he started working closely with Frydenberg when he was an energy minister in the Turnbull government.

On energy policy Frydenberg was thorough and “was engaged with the business community to find out how to improve efficiency in processes,” O’Malley said.

The CBA chairman also pointed out governments work best when senior leaders have history of working between government and business.

“It’s good for business to understand how government works first-hand and vice versa. “Goldman’s is a global firm. And as treasurer, Josh had a global engagement but was also across Australian policy”.

Goldman Australia CEO Simon Rothery.

In his role at Goldman’s to date Frydenberg too has been careful about discussing political institutions he directly oversaw from APRA, ASIC and even the Reserve Bank with those relationships maintained at the executive and banking levels. This arrangement is likely to continue.

The local operations of Goldman will still be run by chief executive Rothery who oversees the day-to-day operations and investment banking operations will continue to be run by Nick Sims and Zack Fletcher.

Frydenberg takes over from Christian Johnston, who retired earlier this year. Although Johnston’s role was in the capacity of executive chairman where he also ran the day-to-day operations. Prior to that, legendary Melbourne stockbroker Terry Campbell of JBWere was the firm’s first Australian chairman.

Frydenberg has a history of investment banking before entering politics, working at Deutsche Bank under then boss Hamish Douglass until he was elected in Kooyong in 2010.

Frydenberg joins the ranks of a string of senior politicians that joined banking in their life after politics.

Paul Keating chaired investment bank Lazard Australia, Warwick Smith was a director of Macquarie Group and had a senior advisory role with ANZ.

Across the Tasman former New Zealand prime minister John Key is the bank’s chairman there.

Former NSW premier Mike Baird had an executive role at National Australia Bank and former Queensland Premier Anna Bligh oversees the Australian Banking Association and has been a director with Medibank Private.

Originally published as Josh Frydenberg new role as investment banker puts him on different path for now